In order for their present business strategy to succeed, both organizations would need to understand the competitive environment in which their businesses reside.
The macro-environment describes all factors which influence the company as a whole but are out of their direct control including wider social, political, economic factors, direct or indirect competition.
The price customers are willing to pay for a product depends, in part, on the availability of substitute products. The absence of close substitutes for a product, as in the airline industry means that consumers are comparatively insensitive to substitutes pricing.
Qantas has a lot of opportunity to grow on the regional front. Its brand, trunk routes and financial strength could be used as opportunities to compete against other regional airlines which fly to Australia e.g. Malaysian Airlines, Thai Airways, and Singapore Airlines etc.
Virgin Blue could tap on the government policy on multiple designations whereby it allows more than one Australian airline to operate international air services.
Escalating cost of fuel, aviation insurance and the unstable political global situation is a major factor of insecurity in the airline business. The demise of Ansett and the governments open skies policy could see a potential threat of entrant from an international airline.
To attain competitive advantage, individual companies would need to consider the above mentioned factors and other more. This will therefore pressure companies to be more productive, to be faster and more agile, to accelerate innovation, to provide quality products, better services, generate greater returns and to fully utilize resources within the organisation to respond and pre-empt these challenges coming from its environment